TVS Motor Company is foraying into premium motorcycles along with BMW. It showcased the TVS Akula 310 concept as well as BMW G310R at the recently held Delhi Auto Expo. K N Radhakrishnan, President and CEO, discusses the roadmap ahead. Excerpts:
How has the journey with BMW been?
BMW has already unveiled its G310R and, based on that, the Akula was also shown at the Expo. The product based on it will come sometime in 2016-17. We are working on the pricing strategy and other issues on retail. However, most of the market share will be driven by our existing products such as the Apache, Victor and Jupiter.
The walk-ins and enquiries are good and, in my view, both are hit products. We have a good portfolio with Star City Plus, Victor, Phoenix and Apache on the motorcycle front. In scooters, we have Scooty Pep Plus, Zest and Jupiter. It is after a long time that TVS has got a full line up of products. In the last two years, our market share has moved from 11 per cent to around 14 per cent this year. In this January-March quarter, we want to log 15 plus per cent. With the new launches, we want to take it to 16 per cent next year and if we are able to get everything right, we should do around 18 per cent by the end of 2016-17. It is challenging, but not impossible.
What could be the most challenging part of this goal?
If the market is growing extremely well, it is good but things could become difficult when it is slow. For instance, we saw one or two per cent growth this year but I am not seeing huge growth next year; it may continue to be in single digits. The rural market is slow and monsoons have been below normal even though they were good in some areas. It might take a little time to revive the spark in rural markets. I believe that we may see some traction during Diwali or soon after.
Is this true for scooters as well?
The scooter market has also come down. At one point in time, it grew by around 30 per cent but has since come down to 10-12 per cent. This only means that there is slowness all around.
Could this be a result of customers opting for low-end cars?
I do not think so. In my view, people who buy cars also buy a two-wheeler which could more likely be a scooter (rather) than a motorcycle. I am yet to see a family with a car but not a two-wheeler. It helps them for short trips and a two-wheeler does make you feel young at the end of the day! I do not believe there is any overlap between (buying) two-wheelers and cars.
Going forward, how do you see the market for 200cc-350cc bikes?
They will have a market here too as in other parts of the world but it might take some time for them to grow here. We need to have investments in infrastructure and urbanisation as these bikes are expensive.
Will the commuter bike segment of 100-150cc be sidelined eventually?
Not really. If you look at India’s demography, market penetration and mobility needs, we are still far away from any such thing happening. It is okay to be sitting in big cities and discussing traffic jams but keep in mind that there are no roads in some parts of rural India. There are people who still use bullock carts to get around. I believe 10-12 per cent CAGR growth will happen for the next 10-15 years. As rural markets also become more developed with power and roads, there is a huge story waiting to unfold in India.
Will these dynamics play out in scooters too?
I think the scooter has a potential market because of its multiple-user base. It can be used by the whole family: the mother, father, son or daughter. The scooter has become a preferred candidate in any family, especially in cities because of its convenience. And with greater urbanisation happening, we will see more scooters coming in.
What do you have to say about the intense competition in India’s two-wheeler arena?
Buyer aspirations go beyond two-wheelers to smartphones, cars and what have you. They want better in everything. This is why we try and give everything a customer wants whether it is fuel efficiency, technology or other features like a mobile charger in a scooter for instance.
The challenges are huge because rivals are not going to wait. It is like a 20-20 cricket match where every player knows how to hit a six and bowlers try their best to ensure that the ball does not connect with the bat! We have an opportunity to take up these challenges and surge ahead.
What are your sales targets next fiscal?
We are doing 1.85-1.90-lakh units each month now and are looking at 2.20 lakh units. By 2018, the target is 2.60 lakh or even close to three lakh units per month as part of the 18 per cent share objective.